Maurice – Court of Quebec finds that fees paid to firms structuring flow-through share deals for clients constituted “commissions” so that there were no s. 20(1)(bb) deductions

The taxpayer (“Maurice”), who was an investment advisor at a wealth management division of a brokerage, was charged fees by two specialist firms (Oberon and WCPD) that were equal to a percentage ranging between 8% and 11% of the dollar value of the flow-through shares that Maurice purchased for his clients through these firms for immediate resale or donation. Their services included sourcing the flow-through shares, conducting due diligence on the issuers, structuring the transactions to produce tax benefits for the clients and negotiating terms.

Chalifour JCQ found that such fees constituted “commissions” and, as such, did not qualify for deduction under TA 157(d) (similar to ITA 20(1)(bb)), stating:

An analysis of case law reveals that the term "commission" is generally understood in its ordinary sense, that is, as variable percentage-based remuneration. …

She further found that “planning aimed at maximizing a tax benefit arising from the flow-through share market” did not come within the services described in s. 157(d), and that Maurice had not established what portion of the fees paid by him so qualified.

Neal Armstrong. Summary of Maurice v. Agence du revenu du Québec, 2026 QCCQ 2205 under s. 20(1)(bb).